Wedbush has reiterated its bullish stance on technology stocks after Micron Technology Inc (NASDAQ:MU), the US memory chipmaker, delivered a quarter that the broker said should alleviate investor concerns over the sector.
Analyst Dan Ives said the results showed the memory and chip trade remained intact and was still in the early stages of playing out, with the artificial intelligence boom only in its third inning
Micron reported third-quarter revenue of $41.5 billion, up 74% on the prior quarter and well ahead of the $35.9 billion expected by analysts. Its data centre revenue has now reached an annualised run rate of about $100 billion, Wedbush noted. Earnings per share came in at $25.11, more than double the previous quarter and ahead of the $20.86 consensus, while gross margin of 84.9% beat expectations.
Wedbush highlighted that demand for Micron’s NAND and DRAM memory chips continued to significantly exceed industry supply, pointing to tight conditions and strong pricing power. The company also signed 16 strategic customer agreements, 14 of which carry cumulative revenue of at least $100 billion over the term of the deals. Guidance impressed the broker further, with Micron forecasting fourth-quarter revenue of $50 billion, against the $43.6 billion the market had expected.